Gas Point Petroleum India Limited Versus Rajendra Marothi & Ors.

Gas Point Petroleum India Limited Versus Rajendra Marothi & Ors.

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले



REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.  619 OF 2023
(@ SLP(C) NO. 15635 OF 2016)
Gas Point Petroleum India Limited                ...Appellant(S)
Versus
Rajendra Marothi & Ors.                    ...Respondent(S)
J U D G M E N T
M. R. Shah, J.
1. Feeling   aggrieved   and   dissatisfied   with   the   impugned
judgment and order dated 29.04.2016 passed by the High
Court of Madhya Pradesh Principal Seat at Jabalpur in
W.P.   No.   3342/2015,   by   which,   the   High   Court   has
allowed the said writ petition preferred by respondent No.
1 herein and has set aside the order passed by the lower
Appellate Court and has restored the order passed by the
Executing Court with respect to the property in question,
1
the   original   respondent   No.   1   –   objector   before   the
Executing Court has preferred the present appeal. 
2. The facts leading to the present appeal in a nutshell are as
under: ­ 
2.1 There was a dispute between National Ginni Enterprises
and Smt. Gayatri Agrawal with respect to the L.P.G. gas
agreement. A civil suit No. 07­A/98 was filed by the said
Smt.   Gayatri   Agrawal   against   the   National   Ginni
Enterprises. The learned Trial Court passed a decree by
directing the judgment debtor (National Ginni Enterprises)
to   provide   L.P.G.   gas   as   per   the   conditions   of   the
agreement. The decree provided that if the defendants are
unable to implement the said order, in alternatively it was
directed that the plaintiff was entitled to get the amount of
Rs. 2,38,450/­ + Rs. 23,500/­ (sic) relating to cost of the
gas cylinders and regulators respectively. The judgment
debtor did not fulfill the first portion of the order and did
not supply the gas cylinders and regulators. Therefore, the
decree   holder   filed   the   execution   petition   before   the
Executing Court. It was decided to sell the property of the
2
judgment debtor.   Accordingly, a declaration was made
and property was auctioned and sold on 03.11.2011 in
favour of respondent No. 1 herein. The appellant herein –
original   respondent   No.   1   filed   objection   before   the
Executing Court, contending,  inter­alia, that the property
was   purchased   by   him   from   judgment   debtor   on
31.08.1999 and that they are in possession of the said
land. An application under Order 21 Rule 90 r/w 151 of
the CPC was filed. The learned Executing Court overruled
the objections and rejected the application under Order 21
Rule 90 by order dated 23.01.2013. The appellant flied
miscellaneous civil appeal before the Court of Additional
District   Judge,   Damoh   being   Misc.   Civil   Appeal   No.
12/2013.   The   lower   Appellate   Court   allowed   the   said
appeal and set aside the order of Executing Court dated
23.01.2013 and remitted the matter back to the Executing
Court to rehear the parties and after taking into account
all   the   facts   and  circumstances,   pass   a   fresh   order   in
accordance   with   law.   The   order   passed   by   the   lower
Appellate Court was the subject matter before the High
Court by way of present writ petition. By the impugned
3
judgment and order the High Court has allowed the said
writ petition and has set aside the order passed by the
lower   Appellate   Court   by   observing   that   the   appellant
herein – original respondent No. 1 has failed to plead and
establish the nature of irregularity or fraud committed in
sale and therefore, no fault can be found in the order of
the Executing Court. 
2.2 Feeling aggrieved and dissatisfied with the judgment and
order passed by the High Court, the original respondent
No. 1 has preferred the present appeal.  
3. Shri Ravindra Shrivastava, learned Senior Advocate has
appeared on behalf of the appellant and Shri Sanjay K.
Agrawal,   learned   counsel   has   appeared   on   behalf   of
respondent No. 1.
4. Shri   Ravindra   Shrivastava,   learned   Senior   Advocate
appearing   on   behalf   of   the   appellant   has   vehemently
submitted that in the facts and circumstances of the case
the High Court has committed a serious error in allowing
4
the writ petition and quashing and setting aside the wellreasoned order passed by the lower Appellate Court.   
4.1 It is submitted that in the present case there was breach of
Order 21 Rule 64 and Order 21 Rule 84/85 of CPC and
therefore,   due   to   non­compliance   of   the   aforesaid
provisions the sale has been vitiated.
4.2 It is submitted that in the present case the property in
question was put to auction on 18.10.2011 and therefore,
the auction purchaser was required to deposit 25% of sale
amount immediately. It is submitted that in the present
case the auction purchaser deposited 25% of the amount
on 03.11.2011. It is submitted that therefore there is a
non­compliance of Order 21 Rule 84 of CPC. It is further
submitted that the balance sale consideration (75%) was
required to be deposited by the auction purchaser within a
period of fifteen (15) days from the date of auction. It is
submitted that in the present case balance 75% of the sale
consideration was deposited by the auction purchaser on
04.11.2011. It is submitted that therefore there is also a
5
violation of Order 21 Rule 85 of CPC. Relying upon Order
21 Rules 64, 84, 85 and 86 and relying upon the decisions
of this Court in the cases of Manilal Mohanlal Shah and
Ors. Vs. Sardar Sayed Ahmed Sayed Mahmad and Anr.;
(1955)  1  SCR  108   and  Rosali   V.  Vs.   Taico  Bank   and
Ors.; (2009) 17 SCC 690, it is prayed to allow the present
appeal. 
4.3 It   is   further   submitted   by   learned   Senior   Advocate
appearing on behalf of the appellant that even otherwise
the High Court has not properly appreciated the fact that
the property in question was purchased by the appellant
on 31.08.1999 from the judgment debtor and at that time
the property in question was not the subject matter of civil
suit. It is submitted that civil suit was filed for specific
performance of the L.P.G. gas agreement. It is submitted
that even injunction dated 18.05.1999 was not the subject
matter of property in question. It is submitted that when
the   property   in   question   was   put   to   auction   by   the
Executing Court on 18.10.2011/03.11.2011 much prior
thereto   the   appellant   purchased   the   property   on
6
31.08.1999. It is submitted that therefore at the time when
the property was auctioned the judgment debtor was not
the owner of the property in question, which as such was
purchased by the appellant by the registered sale deed on
31.08.1999. It is submitted that therefore the High Court
has committed a very serious error in observing that the
appellant purchased the property despite the injunction
granted by the Trial Court on 18.05.1999 and that the
appellant cannot be permitted to raise the objection as the
appellant   has   purchased   the   property   despite   the
injunction.   
4.4 Making the above submissions and relying upon the above
decisions, it is prayed to allow the present appeal. 
5. Present   appeal   is   vehemently   opposed   by   Shri   Sanjay
Agrawal,   learned   counsel   appearing   on   behalf   of
respondent No. 1 herein – auction purchaser. 
5.1 It is submitted by learned counsel appearing on behalf of
respondent No. 1 that in the facts and circumstances of
the case no error has been committed by the High Court in
7
restoring the order passed by the learned Executing Court
and   overruling   the   objections   raised   by   the   appellant
herein – objector. 
5.2 It is submitted that on true interpretation of Order 21 Rule
90 the High Court has rightly refused to set aside the sale
on the alleged violation of Order 21 Rule 64 and Order 21
Rule 84/85. It is submitted that the appellant purchased
the property in question during the pendency of the suit
and the injunction dated 18.05.1999 was in operation. It is
submitted that therefore the appellant shall not be entitled
to raise any objection thereafter and pray to set aside the
sale   on   the   ground   that   the   property   in   question   was
purchased by it. It is submitted that therefore, the High
Court has rightly observed that since, in the civil suit a
temporary injunction was granted by the Trial Court on
18.05.1999   and   by   that   time   the   property   was   not
purchased by the appellant herein there was no question
of putting the appellant to notice. 
8
5.3 It   is   further   submitted   that   even   the   alleged   noncompliance of Order 21 Rule 64, Order 21 Rule 84 and 85
were not raised before the Executing Court and therefore,
the High Court has rightly observed that the same cannot
be permitted to be raised subsequently. 
5.4 Making the above submissions it is prayed to dismiss the
present appeal. 
6. We have heard learned counsel appearing on behalf of the
respective parties at length. 
7. While   appreciating   the   submissions   on   behalf   of   the
respective parties the chronological dates and events are
required to be considered which are as under: ­ 
7.1 In the year 1998, the decree holder filed a suit for specific
performance of the L.P.G. gas agreement; 
7.2 The   civil   suit   was   not   with   respect   to   the   property   in
question. An interim injunction application was filed by
the   original   plaintiff.   It   was   apprehended   that   the
defendants were trying to leave Damoh after selling and
9
transferring their firm, namely, National Gini Enterprises,
to any other person. The application was filed under Order
38 CPC  as well as  for  permanent  injunction.  By order
dated   18.05.1999   the   learned   Trial   Court   directed   to
maintain status quo.  The learned Trial Court also directed
that if the defendants transfer their firm Ginni Enterprises
to any other person then they would not transfer the same
against  the interest  of  the plaintiff. That thereafter the
decree   came   to   be   passed   on   30.09.1999   directing   the
defendants   –   judgment   debtor   –   Ginni   Enterprises   to
supply LPG gas and in the alternative to pay 2,38,450/­ +
Rs. 23,500/­ (sic). As the decree was not executed the
decree   holder   filed   the   execution   proceeding.   In   the
execution proceeding the property in question was put to
auction for recovery of Rs. 2,38,450/­ + Rs. 23,500/­ (sic).
The   property   was   put   to   auction   on   18.10.2011.   The
auction purchaser – respondent No. 1 herein deposited
25% of the amount on 03.11.2011 and deposited balance
75% of the amount on 04.11.2011. In light of above factual
scenario, submissions on behalf of the respective parties,
more particularly, submission on behalf of the appellant
10
on non­compliance of Order 21 Rules 64, 84 and 85 are
required to be considered. 
7.3 While considering the issue involved in the present appeal
with respect to non­compliance of the relevant provisions
of CPC, the relevant provisions of the CPC are required to
be referred to, namely, Order 21 Rules 64, 84, 85 and 86,
which read as under: ­ 
“Order 21 – Execution of Decrees and Orders 
Rule  64. Power to order property attached to be sold
and proceeds to be paid to person entitled.—Any Court
executing a decree may order that any property attached
by it and liable to sale, or such portion thereof as may
seem necessary to satisfy the decree, shall be sold, and
that the proceeds of such sale, or a sufficient portion
thereof,   shall   be   paid   to   the   party   entitled   under   the
decree to receive the same.
Rule  84. Deposit by purchaser and re­sale on default.
—(1)   On  every   sale  of   immovable   property   the   person
declared to be the purchaser shall pay immediately after
such declaration a deposit of twenty­five per cent on the
amount   of   his  purchase­money  to  the  officer   or  other
person   conducting   the   sale,   and   in   default   of   such
deposit, the property shall forthwith be re­sold.
(2)   Where   the   decree­holder   is   the   purchaser   and   is
entitled to set­off the purchase­money under Rule 72, the
Court may dispense with the requirements of this rule.
Rule 85. Time for payment in full of purchase­money.
—The full amount of purchase­money payable shall be
paid by the purchaser into Court before the Court closes
on the fifteenth day from the sale of the property:
11
Provided, that, in calculating the amount to be so paid
into Court, the purchaser shall have the advantage of any
set­off to which he may be entitled under Rule 72.
Rule  86. Procedure in default of payment.—In default
of   payment   within   the   period   mentioned   in   the   last
preceding rule, the deposit may, if the Court thinks fit,
after defraying the expenses of the sale, be forfeited to the
Government, and the property shall be re­sold, and the
defaulting purchaser shall forfeit all claim to the property
or to any part of the sum for which it may subsequently
be sold.”
   
7.4 As   per   Order   21   Rule   84,   on   every   sale   of   immovable
property the person declared to be the purchaser shall pay
immediately after such declaration deposit of twenty­five
per cent on the amount of his purchase­money and in
default of such deposit, the property shall forthwith be resold. 
7.5 As per Order 21 Rule 85, the full amount of purchasemoney payable shall be paid by the purchaser into Court
before the Court closes on the fifteenth day from the sale of
the property. Thus, as per the aforesaid provisions, the
purchaser   has   to   deposit   25%   of   the   sale   amount
immediately on declaring to be the purchaser and the full
amount of the purchase­money shall have to be paid by
12
the purchaser into the Court before the Court closes on
fifteenth day from the sale of the property. 
7.6 In the present case admittedly the purchaser – respondent
No. 1 deposited 25% of the amount on 03.11.2011 and did
not deposit 25% of the amount as required under Order 21
Rule 84 immediately. The auction purchaser was required
to deposit 25% of the amount the day on which he was
declared purchaser i.e., 18.10.2011. Even the balance 75%
of the amount has not been deposited as required under
Order 21 Rule 85. The full amount of the purchase­money
in the present case has been deposited on 04.11.2011 i.e.,
after the period prescribed/provided under Order 21 Rule
85. Therefore, there is non­compliance of Order 21 Rule 84
and Rule 85 of CPC.    
8. In light of the aforesaid facts, few decisions of this Court
on Order 21 Rules 84 and 85 are required to be referred to
and considered.    
8.1 In   the   case   of  Manilal   Mohanlal   Shah   (supra),  it   is
observed and held that the provision regarding the deposit
of 25% of the amount by the purchaser other than the
13
decree­holder is mandatory and the full amount of the
purchase money must be paid within fifteen days from the
date of the sale. It is further observed and held that if the
payment is not made within the period of fifteen days, the
Court has the discretion to forfeit the deposit, and there
the discretion ends but the obligation of the Court to resell
the property is imperative. In paragraph 8 of the decision,
it is observed and held as under: ­ 
“8. The provision regarding the deposit of 25 per cent by
the purchaser other than the decree­holder is mandatory
as the language of the Rule suggests. The full amount of
the purchase money must  be paid within fifteen days
from the date of the sale but the decree­holder is entitled
to the advantage of a set­off. The provision for payment is,
however, mandatory…. (Rule 85). If the payment is not
made within the period of fifteen days, the court has the
discretion to forfeit the deposit, and there the discretion
ends but the obligation of the court to resell the property
is imperative. A further consequence of non­payment is
that   the   defaulting   purchaser   forfeits   all   claim   to   the
property.… (Rule 86).”
8.2 The decision of this Court in the case of Manilal Mohanlal
Shah (supra) fell for consideration before this Court in the
subsequent decision in the case of  Rosali  V.   (supra).  In
the   said   decision   this   Court   interpreted   the   word
“immediately” in Order 21 Rule 84. In the said decision,
this Court considered paragraph 11 of the decision in the
14
case of Manilal Mohanlal Shah (supra) in paragraph 20 as
under: ­ 
“20. What   would   be   the   meaning   of   the   term
“immediately”   came   up   for   consideration   before   this
Court,   as   noticed   hereinbefore,   in Manilal   Mohanlal
Shah [AIR 1954 SC 349] wherein it was held : (AIR pp.
351­52, para 11)
“11.   Having   examined   the   language   of   the
relevant   rules   and   the   judicial   decisions
bearing upon the subject we are of opinion that
the provisions of the rules requiring the deposit
of   25   per   cent   of   the   purchase   money
immediately, on the person being declared as a
purchaser   and   the   payment   of   the   balance
within 15 days of the sale are mandatory and
upon   non­compliance   with   these   provisions
there   is   no   sale   at   all.   The   rules   do   not
contemplate   that   there   can   be   any   sale   in
favour of a purchaser without depositing 25
per cent of the purchase money in the first
instance   and   the   balance   within   15   days.
When there is no sale within the contemplation
of   these   rules,   there   can   be   no   question   of
material irregularity in the conduct of the sale.
Non­payment of the price on the part of the
defaulting   purchaser   renders   the   sale
proceedings as a complete nullity. The very fact
that the Court is bound to resell the property
in   the   event   of   a   default   shows   that   the
previous   proceedings   for   sale   are   completely
wiped out as if they do not exist in the eye of
the   law.   We   hold,   therefore,   that   in   the
circumstances of the present case there was no
sale and the purchasers acquired no rights at
all.”
8.3 Applying the law laid down by this Court in the aforesaid
decisions to the facts of the case on hand, it is evident that
there is non­compliance of mandatory provisions of Order
15
21 Rule 84 and Order 21 Rule 85 and therefore, the sale
was vitiated. 
9. Even   otherwise,   it   is   required   to   be   noted   that   the
appellant herein purchased the property in question much
before the auction of the property i.e., 31.08.1999. At the
relevant time the property in question was not the subject
matter of suit. As observed hereinabove, the subject matter
of   suit   was   specific   performance   of   the   L.P.G.   gas
agreement   and   even   the   ad­interim   injunction   dated
18.05.1999 was also against the transfer of firm Ginni
Enterprises to any other person and the defendants were
directed to maintain status quo with respect to their firm
Ginni   Enterprises.   Therefore,   at   the   time   when   the
property in question was put to auction on 18.10.2011 the
appellant had already purchased the said property as far
as back on 31.08.1999 as there was no injunction with
respect to the said property while ad­interim injunction
dated   18.05.1999   and   as   observed   hereinabove,   the
property in question was not the subject matter of suit and
the   decree   came   to   be   passed   on   30.09.1999   and   the
16
property was put to auction in the year 2011 for recovery
of sum of Rs.  2,38,450/­ + Rs. 23,500/­ (sic). The adinterim  injunction  dated   18.05.1999  cannot   be  pressed
into   service   against   the   appellant.   Therefore,   the   High
Court has committed an error in considering injunction
dated 18.05.1999 against the appellant. Therefore, at the
time when the property was put to auction on 18.10.2011,
the judgment debtor was not the owner and therefore, the
same   could   not   have   been   put   to   auction.   Under   the
circumstances,   learned   Executing   Court   erred   in
overruling the objections raised by the appellant against
the   auction/sale   of   the   property   which   the   appellant
purchased much prior to the date of the auction i.e., on
31.08.1999. 
10. In view of the above and for the reasons stated above, the
impugned judgment and order passed by the High Court
deserves to be quashed and set aside and is accordingly
quashed and set aside and consequently the order passed
by the Executing Court overruling the objections raised by
the appellant also deserves to be quashed and set aside
17
and is quashed and set aside. The order passed by the
lower Appellate Court is hereby restored. It will be open for
respondent No. 1 to get back the amount deposited by
him, lying with the Executing Court. Present appeal is
accordingly allowed. In the facts and circumstance of the
case there shall be no order as to costs. 
…………………………………J.
                (M. R. SHAH)
…………………………………J.
 (C.T. RAVIKUMAR)
NEW DELHI, 
FEBRUARY 10, 2023.
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